Isn't a Local Agent Better than Redfin?

By Dave Fratello | March 16th, 2017

Here you are on a local real estate website. Nice to have you here.

If you're here, odds are that you also use Zillow and/or Redfin to track the market. MBC can't do everything those corporate types can do, but you know that we're hyper-local in a way they never could be.

From talking to Dave's clients along the way, we have the impression that everyone active in the market gets Redfin email updates, but that no one would actually consider hiring Redfin for their home sale or purchase.

Is this selection bias? We're only talking about people who are engaged with Dave! But no, the data mostly prove this out.

For one thing, we're unaware of Redfin ever representing a seller/listing in Manhattan Beach. It's possible we missed one.

Redfin did represent some MB buyers last year, with a few late in the year in East Manhattan. However, 4 or 5 sales out of the 391 real estate transactions in Manhattan Beach in 2016 doesn't qualify Redfin for their own slice in the market-share pie chart.

Recently we got the flavor of why buyers might not hire Redfin, even after a test drive. 

We were showing one of Dave's listings. The Redfin agent had arranged it in advance, perhaps after the buyers touched the handy button on the app on their phone to "schedule a tour."

The agent was pleasant and professional, but...

New.

And had never met the buyers before.

She had just arrived in MB from a showing in Whittier. (Pretty sure that's someplace east of Sepulveda, kind of far.)

After the MB showing, she was headed to a showing in the Palms neighborhood, east of Venice.

So this is what you might get when you tap a button on your app. Someone who may very well be competent, but who's also running around Southern California like a driver for a ride-sharing app.

And this, in turn, raises the fairly obvious question: Isn't local expertise worth something?

This post could turn into a long essay (and a predictable one) if we tried to answer that question fully. So we'll stick with: Duh, yes. Local expertise should probably be your #1 criterion for selecting an agent. (Like Dave!)

Redfin dangles out the prospect of some kind of discounting to sellers and buyers. The rates have changed over time. In the early days, Redfin was offering to list properties for a shockingly low flat fee around $500, but now they take a percentage that's not so different from any other broker's standard fee. A touted buyer "rebate" is tough to nail down in advance, to know what you're going to get, but it sounds like you'd get a few thousand dollars toward closing costs.

Of course, it's arguable whether a buyer's agent from out of the area, juggling appointments from the beach to L.A. all day, can get you the right purchase price in the first place. So where, exactly, do you save?

Now, we don't mean to bury Redfin. They deserve praise for the impossible job they tackled and with which they appear to be succeeding in spades, with big revenues from all over the USA. They've flattened out the real estate market across multiple states and counties and cities, overcoming the headaches of provincial realtors' associations and dastardly difficult data-sharing. Their tech is amazing, which is why users like it so much. And here at MBC, you're only going to find love for those who would disrupt the real estate industry as it has been practiced traditionally.

Still, it's funny for a brokerage to have their app on every other phone in a given real estate market, but few actual clients.

Consumers vote with their checkbooks: Nice free app, but for our $2M+ purchase, we're going to hire locally.

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Addendum: Article 15 of the Realtor Code of Ethics says, "Realtors shall not knowingly or recklessly make false or misleading statements about competitors, their businesses, or their business practices." This post is not reckless or knowingly false or misleading, even if it's not exactly a wet kiss.

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